Broadbandit Winnick, Others settle

Global Crossing former officers and directors, including founder Gary Winnick and the company’s former law firm, agreed to pay a combined $325 million in cash to a group of investors to settle two class-action lawsuits. Under the settlement, Mr. Winnick, who resigned from the company in December 2002, agreed to pay a total of $55 million to plaintiffs in the two lawsuits, reports the Wall Street Journal.

The Public Employees Retirement System of Ohio and the State Teachers’ Retirement System of Ohio lost about $110 million in Global Crossing securities and will get a bulk of the settlement.

bq. Winnick, the founder and former chairman who sold $123 million worth of Global Crossing stock as the company spiraled toward one of the biggest bankruptcy filings in U.S. history, will pay $55 million of the settlement, according to the law firm Grant & Eisenhofer PLC.

In other words these folks he gets to keep half the loot he snagged by pulling the global double crossing. That despite the fact that he is still upto his usual tricks. The New York Times reports that Winnick will actually contribute $30 million to the settlement, while Simpson Thacher & Bartlett, Global Crossing’s law firm, will pay $19.5 million, even though the firm was not named as a defendant.

bq. In about three months, the settlement will be submitted to a final approval hearing before Judge Lynch. The Pender Insurance Company, which insured the officers and directors of Global Crossing and its affiliate, Asia Global Crossing, paid the bulk of the settlement…..The $30 million from Mr. Winnick is in addition to a $25 million fund he set up in December 2002 for Global Crossing employees who lost money investing in the retirement plan, the Times says.

Actually my sources tell me that employees have not really seen much of that $25 million. Lou Dobbs – story tip – chase these crooks, for they have caused more pain and are one of the real reason economy is hurting.